A channel of distribution, also referred to as a distribution channel, a marketing channel, a marketing channel network or a channel marketing network, may be defined as the collection of organizational units, institutions, or agencies within, external to, or inclusive of a manufacturer of products and/or services, which perform the functions that support product and/or service distribution and/or marketing, such as conducting product and/or service advertising campaigns. The marketing functions are pervasive and may include buying, selling, transporting, storing, grading, financing, bearing market risk, and providing marketing information. Any organizational unit, institution, or agency that performs or assists in the performance of one or more of the marketing functions may be a member of a channel marketing network.
Participants of a particular channel marketing network may include a sponsor, one or more intermediaries and one or more resellers. Sponsors are typically a manufacturer or other originator of products and/or services for sale to consumers and may promulgate one or more particular exclusive brands. Resellers are organizations or entities, such as retail outlets or direct sales organizations, which typically purchase, directly or indirectly, products and/or services from a sponsor with the intent to resell those products and/or services to consumers. Intermediaries may include organizations or entities, such as a distributor or reseller association, which facilitate the sale of products and/or services of one or more sponsors by one or more resellers.
In any given channel marketing network, each participant may have an interest in marketing, e.g. conducting advertising campaigns for, the particular products and/or services of a particular sponsor, to facilitate sales to consumers and generation of revenue. Further, sponsor participants may be interested in coordinating with, or otherwise helping, other participants, e.g. intermediary and/or reseller participants, to conduct advertising campaigns as well as to manage those campaigns to ensure, for example, consistent brand presentation, avoidance of activities detrimental to the brand, ensure fair opportunities among participants and generally minimize inefficiencies in the marketing and sales process.